Election Impact on your Currency Transfers
Cast your mind back to May 17th 2015 and the last general election, when David Cameron was elected as Prime Minister after winning a clear majority. Mr Cameron’s success came as a big surprise as the pre-election polls predicted another hung parliament. The surprise gave Sterling an immediate boost and rose on average by 3.4% by the end of the week. Great news for people and companies who were buying Euros, US Dollars, Australian Dollars, NZ Dollars etc. but terrible news for those selling currency and buying Sterling.
Fast forward to 24th June 2016 and the Brexit result. A result that took the currency markets by surprise and Sterling plunged; pre-Brexit, Sterling was trading at 1.29 against the Euro, at 1.45 against the US Dollar and at 1.95 against the Australian Dollar only to fall to 1.20, 1.32 and 1.71 respectively. On a £100,000 that equates to a loss of EUR 9,000, USD 13,000 and 24,000 AUD…!!
This week, the UK votes again and the currency markets are uncertain again. When Theresa May called the election on 18th April, Sterling rose 2.8 cents against the Euro, 3.5 cents against the US Dollar and 4.5 cents against the NZ and Australian Dollars. Since then, as the polls have shown the Conservative’s lead decrease, so the value of Sterling has dropped.
So, it is simple then. The Conservatives win, Sterling goes up. A hung parliament and no clear majority for the Conservatives and Sterling goes down. But, and it is a BIG but, it is not clear who will win.
If you are moving overseas, buying an overseas property or emigrating can you afford to take the risk of the market moving against you like it did after Brexit? If you are running a business exposed to currency, can you risk not protecting yourself from the volatility that will follow the election?
Whatever your requirement, whether it is immediate or long-term, there are ways to protect yourself. Just let us know what you are looking at and we will be able to assist.
Finally, whilst it is not clear which way the election will go, the last two elections and Brexit have proved the currency markets WILL do something. You should do too.